September 2019

Recent unionization of GTA Uber Black drivers spells trouble for ride-sharing’s controversial business model

by Mike Beggs

In yet another headache for Uber, at least several hundred GTA drivers working with the Uber Black luxury service are now being represented by the United Food and Commercial Workers (UFCW), a private sector union with 250,000 members across many Canadian industries, and extending into the U.S.

At a press conference held at the Sheraton Centre Toronto Hotel on June 26, they aired grievances about low pay, the inequity of Uber’s driver rating system, poor communication, a lack of respect, and unsafe working conditions. (According to a recent study by the Economic Policy Institute, after costs, most Uber drivers earn less than $10 an hour).

“Uber has to understand that they are the employer and we are the workers,” driver/organizer Ejaz Butt told CBC’s Metro Morning . “Without the drivers, Uber is nothing.”

“Uber calls us partners, but we have absolutely no say about our working conditions, or even being able to take a bathroom break. We know we make a lot of money for Uber, but in return we get treated like we don’t matter.”

To CBC, UFC national coordinator for gig and platform-based initiatives Pablo Godoy spoke of drivers working more than 100 hours a week to get by and having to cover their own fuel and repairs, while living in fear of getting a low rating from passengers.

He noted that Uber has the right to deactivate a driver’s account without any meaningful hearing process or advanced knowledge, and related that, “individually, many of the drivers that have come to us don’t feel like they’re being listened to.”

On May 17th in Vancouver’s The Province, writer Steven Bochenek observed that, “driving for Uber isn’t all it’s cracked up to be” in the ads, after signing up to drive for the ridesharing giant as part of his research.

He wrote that Uber, “flatters its drivers by calling them independent business people”, while the company sets the rates, and, “drivers are continually nudged towards what is functionally shift work”. Drivers are also responsible to pay for their vacations, gas, repairs, and that free bottle of water for customers.

“Your boss is a weird amalgam of an app, and the passenger. And if you don’t play by their rules, they cut you off,” he added.

Godoy said the Uber Black drivers will have the full support of the union, in attempting to call Uber to the table. To this point, Uber management has not responded.

Around the world, Uber has resolutely defended the position that it is a technology company -- not a transportation provider -- and that its drivers are independent contractors. Taxi operators widely dispute this claim, such as in Toronto where Uber has cut into their business by a staggering 75 percent.

Uber drivers are currently not receiving minimum wage, sick pay, vacation days, overtime, mandatory breaks, and other such benefits, which the union claims they are entitled to under the Ontario Employment Standards Act.

While the number of card-carrying Uber Black drivers is a small percentage of Toronto’s estimated 90,000 ridesharing drivers, this could become a litmus test for workers’ rights within the new “gig economy”.

To the Huffington Post Canada, UFCW leaders stressed the importance of legislators and policymakers taking a proactive approach to responding to this disruptive technology, “that’s really challenging traditional frameworks of representation,”

“Uber is an employer, drivers are employees and the technology is just a management tool. It’s not an escape hatch from being a decent employer,” stated national president Paul Meinema.

“Companies like Uber cannot be allowed to move back the dial on employment practices under the guise of innovation.”

While unionization drives have taken place in numerous U.S. cities, Uber has been able to ward off attempts at attaining employee status. Vox observes that ride-hailing apps, “have done everything in their power to keep drivers as contractors, because their profit model depends on all the money saved from skirting US labour laws.”

But labour problems keep recurring, highlighted by a coordinated day-long protest in May across 10 U.S. cities and into Europe, where many Uber and Lyft drivers turned off their apps, claiming “poverty wages”.

In December of 2018, New York’s Taxi and Limousine Commission set a nationwide precedent by voting to mandate a minimum wage of $17.22 after expenses for the city’s 90,000 Uber and Lyft drivers. Both companies warned that this would result in higher fares for riders.

And in a July 15 article, Bloomberg reported that this may be turning off their price-conscious customers. According to the Taxi and Limousine Commission, Uber handled 15.9 million trips in May across New York, down by 8 percent from March. Likewise, Lyft completed 4.7 million trips in May, down by 17,000 compared to March.

From Bloomberg’s perspective, these numbers indicate the actions taken by New York lawmakers, “pose a risk to (both companies’) operations.”

Meanwhile in California, disgruntled Uber drivers have spent more than six years fighting the company in court, saying they’ve been intentionally misclassified. And according to Vox, in May Uber settled the main court case with 13,600 Uber drivers, agreeing to pay them $20 million but without changing their status as independent contractors.

Vox reports that Uber and Lyft are now aggressively campaigning against a proposed bill (known as “AB 5”), which has the potential to upend their business model and rewrite the rules for the whole gig economy. Uber and Lyft are reportedly willing to improve driver pay, and boost benefits, but only if they do not have to categorize workers as employees.

Uber CEO Dara Khosrowshahi and Lyft leaders John Zimmer and Logan Green recently released a joint op-ed piece in the San Francisco Chronicle which addressed worker issues -- but failed to make any direct reference to AB 5. They warned their drivers, if they becomes classified as employees they will no longer enjoy the freedom of making their own schedules.

But they also acknowledged, “It’s no secret that a change to the employment classification of ride-share drivers would pose a risk to our business.”

Should this bill pass, Uber and Lyft could be forced to reclassify tens of thousands of California drivers as employees.

“Big businesses shouldn’t be able to pass their costs on to taxpayers, while depriving workers of the labour law protections they are rightfully entitled to,” tweeted San Diego Assembly member Lorena Gonzalez, after members voted in favour of the bill, which now must pass through the Senate.

In a July 8 interview with The Toronto Star, Jim Stanford, Unifor’s former chief economist addressed the growing precariousness of working in Canada for companies like Uber and Lyft. He observes that while Uber has developed a world-famous app, “the actual work hasn’t changed one iota.”

“There’s still a car and a driver, and they pick up at point A and they take you to Point B,” he told The Star. “The only thing technology has changed is the employment relationship. Uber has seized on that opportunity to redefine its workers in a way that removes most of their traditional rights. That isn’t driven by technology at all, and it isn’t evolution. You could have an app-based taxi-hailing system where workers are given the same rights.

“Their claim that this is inevitable and is driven by the onward march of technology is absolutely false.”

Since its arrival in Toronto, taxi industry members have lambasted Uber for circumventing regulations while building up a vast customer base – predicated largely on cheap rides, which they say are subsidized by the company.

Some suggest, should ridesharing drivers get reclassified as employees, the Uber and Lyft business model couldn’t possibly hold up with all of the added costs.

“Their whole business program is based on playing fast and loose with the rules. Once they have to start living up to the rules, then their business model kind of sinks into the quicksand,” suggests Mark Sexsmith, marketing manager with All-Star Taxi, in Mississauga. “As soon as they have to start accounting for unions and having to pay taxes, it’s a major blow to their way of operating.”


© 2019 Taxi News



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